WEBVTT - Why a Wayfair Sales Tax Case Sparked Pandemic Windfall 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanobek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.600 plus technology, politics, economics, all harnessing the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:19.599 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.200 download Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:28.360 pm Eastern Time on Bloomberg Radio or watch us on YouTube. 0:00:28.400 --> 0:00:34.960 Search Bloomberg Global News. Well a lot of virus headlines 0:00:35.000 --> 0:00:37.279 to catch up off on this Monday afternoon. The big 0:00:37.280 --> 0:00:40.720 news today, though, the CDC issuing it's long awaited guidance 0:00:40.760 --> 0:00:43.640 for what fully vaccinated people can do. They say that 0:00:43.680 --> 0:00:47.440 fully vaccinated people can visit indoors without masks, but still 0:00:47.760 --> 0:00:50.120 must wear them in public and avoid large gatherings went 0:00:50.159 --> 0:00:52.720 around those who aren't immunized or who are at high 0:00:52.800 --> 0:00:56.160 risk for contracting COVID nineteen. Dr Rochelle Willinsky of the 0:00:56.200 --> 0:01:01.440 CDC made the announcement earlier today. Fully vaccinated people can 0:01:01.560 --> 0:01:06.280 visit with other fully vaccinated people in small gatherings indoors, 0:01:06.640 --> 0:01:10.440 without wearing masks or physical distancing. Remember here we are 0:01:10.480 --> 0:01:16.240 talking about private settings where everyone is vaccinated. Private settings 0:01:16.240 --> 0:01:20.160 where everybody is vaccinated that long awaiting guidance. Again, that's 0:01:20.240 --> 0:01:23.679 Dr Michelle Willinsky of the CDC with those comments earlier today. 0:01:23.959 --> 0:01:27.080 Joining us now from Seattle is Dr Joeanne Roberts, chief 0:01:27.160 --> 0:01:31.200 Value Officer at Providence St. Joseph Health. Dr Roberts, thanks 0:01:31.240 --> 0:01:34.440 so much for joining us on this these this guidance 0:01:34.480 --> 0:01:37.119 from the c d C. What was your reaction as 0:01:37.120 --> 0:01:40.240 a doctor when you heard this earlier today. It's good 0:01:40.240 --> 0:01:42.800 to be with you, Tim, and thanks so much. I 0:01:42.840 --> 0:01:46.760 was really excited and I thought the CDC is recommendation 0:01:46.959 --> 0:01:49.800 made a lot of sense. And it's a real, real 0:01:49.880 --> 0:01:54.560 gift to families, especially because I think uh grandparents have 0:01:54.680 --> 0:01:56.840 been separated from their rand kids and this will be 0:01:56.880 --> 0:01:59.280 an opportunity for them to get together for the first 0:01:59.320 --> 0:02:02.360 time in a year. Some people may be saying to themselves, though, 0:02:02.560 --> 0:02:08.720 no more avoiding the in laws right. Perhaps so no, 0:02:08.840 --> 0:02:12.040 but it's a big step forward. Dr Roberts, um, but 0:02:12.120 --> 0:02:15.400 again the caveat these are people who have been vaccinated, like, 0:02:15.440 --> 0:02:18.520 we need to remember that they're still and I think 0:02:18.919 --> 0:02:21.400 Dr Lensky kind of laid this out to that there 0:02:21.400 --> 0:02:24.480 are still risks out there because the numbers haven't come 0:02:24.520 --> 0:02:27.919 down as quickly as everybody had hoped. No, and they 0:02:27.960 --> 0:02:31.600 have plateaued, Carol, and that that is concerning and we'll 0:02:31.639 --> 0:02:33.880 see how that plays out in the next few weeks. 0:02:33.919 --> 0:02:38.280 But I think her her comments about vaccinated people in 0:02:38.400 --> 0:02:42.280 small gatherings at private settings with vaccinated people and then 0:02:42.320 --> 0:02:46.480 also vaccinated folks who are with low risk folks. So 0:02:46.800 --> 0:02:51.280 and again that's that's the typical grandparent grandchild kind of 0:02:51.320 --> 0:02:54.919 relationship where the kids might not be vaccinated, but they're 0:02:54.960 --> 0:02:58.600 not at high risk of getting terribly sick, so they 0:02:58.680 --> 0:03:02.000 feel that that's a fairly fairly safe environment as well. 0:03:02.280 --> 0:03:04.160 You know, Dr, when I heard this from Dr Willnsky 0:03:04.200 --> 0:03:06.760 earlier today, I thought, this is just a huge win 0:03:06.880 --> 0:03:09.480 for messaging around the vaccine, because what it does is 0:03:09.480 --> 0:03:12.120 it shows you that the CDC is finally now saying 0:03:12.160 --> 0:03:15.120 you can act differently after getting this this this life 0:03:15.120 --> 0:03:20.280 saving medicine. Yes, I I agree, and I welcome also 0:03:20.960 --> 0:03:24.919 Dr Willnsky's leadership in this. I think historically the medical 0:03:24.960 --> 0:03:28.760 community has looked to the CDC as a voice of 0:03:28.840 --> 0:03:32.680 science and reasonable policy, and I think we're hearing that 0:03:32.880 --> 0:03:35.400 from the CBC. Now. Dr Roberts want to ask you. 0:03:35.400 --> 0:03:37.680 You guys have been really kind to us here at Bloomberg, 0:03:37.760 --> 0:03:41.680 and we have been talking to you for over a year. UM, 0:03:41.720 --> 0:03:44.800 as we've all been dealing with the pandemic. You guys 0:03:44.840 --> 0:03:47.400 were ground zero. You're one of the largest health care 0:03:47.400 --> 0:03:52.520 systems in the US massive fifty one hospitals, seven states. Uh. Massive, 0:03:52.760 --> 0:03:57.880 But the first case of COVID was within your hospital system. 0:03:58.040 --> 0:04:00.760 So here we are a year later. Are are we 0:04:00.840 --> 0:04:03.560 where you thought we would be? And what gives you hope? 0:04:03.640 --> 0:04:09.600 What gives you frustrations or nervousness as we move forward? Oh? 0:04:09.680 --> 0:04:13.040 What a great question. I you know, I, Carol, We're 0:04:13.080 --> 0:04:16.719 actually in a better place than I expected. UM. I think, 0:04:17.200 --> 0:04:20.120 especially with this release of the most recent vaccine, with 0:04:20.240 --> 0:04:25.200 Johnson and Johnson vaccine, I really think that we will 0:04:25.360 --> 0:04:30.159 see something close to normalcy six months sooner than I 0:04:30.480 --> 0:04:34.200 than I would have expected six months ago, for example. 0:04:34.760 --> 0:04:39.039 So Um, as bad as things have been and we're 0:04:39.080 --> 0:04:41.479 not out of the woods yet, I think the future 0:04:41.640 --> 0:04:45.080 is looking brighter. Um, than I would have thought a 0:04:45.120 --> 0:04:47.920 few months ago. When you say normal, quote unquote normal, 0:04:47.960 --> 0:04:51.200 as we like to say, Um, we've heard different things. 0:04:51.200 --> 0:04:54.960 We've heard October, November, we've heard maybe summer. What's what's 0:04:55.000 --> 0:04:59.200 your time frame in terms of society feeling a lot 0:04:59.200 --> 0:05:02.200 more normal? Well, I think you know, I'm not sure 0:05:02.279 --> 0:05:04.640 we'll ever go back to what we used to call normal. 0:05:04.680 --> 0:05:06.920 I mean, I think a mask is going to be 0:05:07.000 --> 0:05:11.200 part of my wardrobe for the law to future. I mean, 0:05:11.240 --> 0:05:13.680 I I frankly, I don't think I'll be getting on 0:05:13.720 --> 0:05:18.440 an airplane even two years from now without a mask. Um. 0:05:18.480 --> 0:05:21.440 And that's okay. I mean, that's a small price to 0:05:21.440 --> 0:05:24.279 pay to stay healthy. Um. But I think we'll be 0:05:24.320 --> 0:05:29.839 seeing slowly larger and larger gatherings my guests, especially with 0:05:29.960 --> 0:05:32.719 this most recent report in with CDC. My guess is 0:05:32.760 --> 0:05:37.039 it by fall, schools will be meeting in person most 0:05:37.120 --> 0:05:40.240 in most of the country. But I think, um, as 0:05:40.279 --> 0:05:42.640 the Biden administration has said, if we can get these 0:05:42.720 --> 0:05:46.800 vaccines out by this summer, which is looking likelier, I 0:05:46.839 --> 0:05:49.960 think we'll all be able to gather again. By Can 0:05:50.000 --> 0:05:52.440 I go to a concert anytime soon with thousands of 0:05:52.480 --> 0:05:55.560 people just got about thirty seconds here. I wouldn't be 0:05:55.600 --> 0:05:59.080 going this spring, but you know, you might start looking 0:05:59.120 --> 0:06:02.719 at take up for the ball, maybe wearing a mask, Carol, maybe, 0:06:02.800 --> 0:06:06.719 probably always Dr Roberts, I want to ask you. It 0:06:06.800 --> 0:06:11.760 is International Women's Day, and I just think, here we 0:06:11.800 --> 0:06:14.440 are still talking about women, you know, having the same 0:06:14.480 --> 0:06:17.280 opportunities as men. It's gotten better. It's certainly different than 0:06:17.560 --> 0:06:19.480 it was from my mom or my older sisters. And 0:06:19.600 --> 0:06:21.039 it was for me and it will be for my 0:06:21.160 --> 0:06:24.839 daughter who's a teenager. But I do wonder, as a 0:06:24.839 --> 0:06:27.120 woman coming up in medicine, what was the toughest thing 0:06:27.160 --> 0:06:32.960 you ever faced? Oh, my gosh, there a list, honestly, Oh, 0:06:33.040 --> 0:06:35.480 there's a there is a list. And uh, you know, 0:06:35.520 --> 0:06:39.279 by the time I came to medicine, Carol, Uh, more 0:06:39.320 --> 0:06:42.440 than half of my medical school quests were women. So 0:06:42.560 --> 0:06:47.200 I think, um, women were part of the mainstream of learners, 0:06:47.279 --> 0:06:50.640 but they still weren't in the mainstream of leaders and 0:06:50.920 --> 0:06:54.200 in academics. I know that it's still true. Uh, there's 0:06:54.279 --> 0:06:56.640 lots of articles written about it. I will say I 0:06:56.720 --> 0:07:02.440 just heard in our organization this morning of our senior 0:07:02.560 --> 0:07:06.120 leaders at Providence are women, which makes me very proud 0:07:06.200 --> 0:07:10.120 to work for an organization that recognizes that women can 0:07:10.160 --> 0:07:14.600 and should step up to leadership. I'm wondering about we 0:07:14.760 --> 0:07:18.280 have heard so much about during the pandemic, how this 0:07:18.320 --> 0:07:22.120 has disproportionately affected women. Um, we've heard of women dropping 0:07:22.120 --> 0:07:24.840 out of the workforce. Are you seeing that in healthcare 0:07:25.120 --> 0:07:27.800 at all right now? I mean we know about burnout 0:07:27.840 --> 0:07:31.480 when it comes to doctors and healthcare professionals, especially over 0:07:31.520 --> 0:07:34.160 the last year. They have just worked so hard. What 0:07:34.200 --> 0:07:38.360 are you seeing? What we're seeing is you're right, burnout 0:07:38.480 --> 0:07:42.640 is that all time high? We have not seen an 0:07:42.640 --> 0:07:47.160 exit from the workplace, but we are worried about it 0:07:47.320 --> 0:07:51.840 because once things come down, I mean, healthcare workers will 0:07:51.920 --> 0:07:55.680 respond to a crisis like like all public servants. They 0:07:55.680 --> 0:07:59.280 will step up in a crisis. Our worry is that 0:07:59.400 --> 0:08:02.480 folks are so tired and so burned out that once 0:08:02.520 --> 0:08:05.960 the crisis is a little bit further along and it's past, 0:08:06.600 --> 0:08:10.280 that we'll see people leaving the healthcare field. Um. And 0:08:10.320 --> 0:08:15.960 we're working hard to prevent that as things get better. Wow, 0:08:16.560 --> 0:08:21.720 that's worrisome. It is worksome. Yeah, what has to change 0:08:21.760 --> 0:08:24.360 to prevent that? We've already seen? I mean, haven't we 0:08:24.360 --> 0:08:27.960 already seen some big changes to the way doctors and 0:08:28.720 --> 0:08:33.360 medical students will spend their early years. The hours have 0:08:33.440 --> 0:08:36.880 shifted in recent years, right to make it less taxing. 0:08:37.400 --> 0:08:40.600 Am I correct in thinking that the hours in training 0:08:40.679 --> 0:08:44.880 have changed, but the hours in practice haven't changed. And uh, 0:08:45.040 --> 0:08:48.800 and we need to recognize that as tell tell a 0:08:48.880 --> 0:08:51.640 health becomes more common, that may be a way to 0:08:51.880 --> 0:08:56.000 reduce the workload on positions in their suits. Um, we're 0:08:56.080 --> 0:08:58.880 just going to have to continue to experiment and try 0:08:58.960 --> 0:09:02.280 things out. It comes down to putting our caregivers in 0:09:02.320 --> 0:09:06.160 the center of everything we do. What we when we 0:09:06.240 --> 0:09:11.959 find that we serve our caregivers first and foremost, they 0:09:12.000 --> 0:09:15.360 will serve their patients first and foremost, and they'll take 0:09:15.400 --> 0:09:18.320 care of the better. You know. I came across some 0:09:18.400 --> 0:09:21.240 stats kind of getting ready for our chat with you, 0:09:21.440 --> 0:09:25.560 and women represented close to the global healthcare workforce in 0:09:26.440 --> 0:09:29.040 so a few years back, almost half of all doctors 0:09:29.080 --> 0:09:32.480 in the O E C D countries where women. So 0:09:32.520 --> 0:09:35.720 we definitely have seen a lot of progress when it 0:09:35.760 --> 0:09:38.520 comes to management, like you mentioned your organization, But in 0:09:38.600 --> 0:09:43.360 general is that the case? In general, that is not 0:09:43.480 --> 0:09:47.280 the case. It's better across the board. Uh, The area 0:09:47.360 --> 0:09:50.760 that I'm most concerned about is in the academic world, 0:09:51.280 --> 0:09:54.559 where where our young people are learning how to become 0:09:54.640 --> 0:09:58.360 doctors and nurses. We want the academic world to recollect 0:09:58.960 --> 0:10:02.559 the greater population, so more than half of when more 0:10:02.600 --> 0:10:05.120 than half of medical students are women, I would like 0:10:05.160 --> 0:10:06.960 to see the time when more than half of our 0:10:06.960 --> 0:10:09.240 senior faculty or women. It is so it is so 0:10:09.280 --> 0:10:11.360 interesting to be talking about burnout at the same time 0:10:11.360 --> 0:10:14.319 as seeing the headlines UM that a record number of 0:10:14.600 --> 0:10:17.360 medicals of students are applying to Meta School Medical School 0:10:17.360 --> 0:10:19.640 because they've been inspired by what has happened over the 0:10:19.720 --> 0:10:22.400 last year. And we only have about twenty seconds left. 0:10:24.080 --> 0:10:26.480 It's the most honorable thing I could imagine doing. So 0:10:26.840 --> 0:10:31.480 you're asking the biased observer, Yeah, well, we appreciate it 0:10:31.520 --> 0:10:34.400 as always. Dr Joey and Roberts, thank you, Chief Value Officer, 0:10:34.520 --> 0:10:38.520 Providence St. Joseph's Health, massive healthcare system out there on 0:10:38.559 --> 0:10:41.720 the West Coast and actually throughout seven states UH in 0:10:41.760 --> 0:10:44.000 the United States, joining us once again on the phone 0:10:44.040 --> 0:10:47.040 from Seattle. UM. Good to hear perspective though in terms 0:10:47.080 --> 0:10:49.360 of one year later. And I also love hearing the 0:10:49.360 --> 0:10:53.680 optimism right just so optimistic about about where we are now. 0:10:54.000 --> 0:10:58.000 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:10:58.080 --> 0:11:02.320 Quick Takes Tim Stinovic Bloomberg Radio. Carol, is strange thing 0:11:02.400 --> 0:11:05.520 happened in and I talked talked about this quite a bit. 0:11:05.520 --> 0:11:08.440 Despite the fact that the US economy saw the deepest 0:11:08.480 --> 0:11:12.400 recession since World War Two, millions of people lost their jobs, 0:11:12.760 --> 0:11:16.640 state finances in general, we're actually okay, like, what's up 0:11:16.640 --> 0:11:18.880 with that? Yeah? So, for example, Texas faced a four 0:11:18.920 --> 0:11:21.839 point six billion dollar budget shortfall last July, and now 0:11:21.960 --> 0:11:24.560 it's just a fraction of that. This build on that 0:11:24.600 --> 0:11:26.920 story we talked about last week, right, why are the 0:11:26.960 --> 0:11:29.600 States in a tougher place? And this one provides a 0:11:29.640 --> 0:11:33.120 little bit of another piece to that puzzle. Joining us 0:11:33.200 --> 0:11:36.120 now from the from the student, well not the studios, 0:11:36.160 --> 0:11:38.200 but a studio here in the middle around the bend, 0:11:38.280 --> 0:11:41.800 yea maybe down the staircase Bloomberg Headquarters. Is Danielle Moran 0:11:41.920 --> 0:11:45.560 Muni Bond reporter for Bloomberg News. Her story is in 0:11:45.600 --> 0:11:48.680 the current issue of Bloomberg Business Weekend. It is all 0:11:48.720 --> 0:11:52.160 about a Supreme Court case a few years ago that 0:11:52.280 --> 0:11:56.079 arrived just in time for the pandemic. Hey Danielle, Hi, guys, 0:11:56.080 --> 0:11:58.120 how are you so? Tell I'm good. Tell us a 0:11:58.160 --> 0:12:01.760 little bit about what happened between Wayfair and one of 0:12:01.800 --> 0:12:06.080 the Dakotas. Yes. So, for years before the pandemics, state 0:12:06.160 --> 0:12:08.800 and cities were worried about losing on one of their 0:12:08.840 --> 0:12:12.280 major sources of revenue, which is sales taxes. As brick 0:12:12.320 --> 0:12:15.439 and mortar retail shifted online, people stopped going to malls, 0:12:15.720 --> 0:12:19.800 stopped going to stores, they started buying stuff through their computers. 0:12:19.880 --> 0:12:24.160 And that debate really came to a head in with 0:12:24.280 --> 0:12:28.800 the Supreme Court case that decided Um South Dakota versus Wayfair, 0:12:28.920 --> 0:12:33.319 the furniture diet. Um that South Dakota passed the law 0:12:33.400 --> 0:12:36.600 that allowed them to collect sales taxes on purchases from 0:12:36.640 --> 0:12:39.960 companies that didn't have a physical presence there um, and 0:12:40.000 --> 0:12:42.719 the Supreme Court upheld the decision saying that they were 0:12:42.760 --> 0:12:46.599 permitted to collect these taxes. And that really was a 0:12:47.040 --> 0:12:50.120 like for two disdecision coming two years before the pandemic 0:12:50.160 --> 0:12:53.839 went almost all shopping shifted online. Talk about timing well, 0:12:53.840 --> 0:12:56.280 listen like as a consumer right for such a long time, 0:12:56.679 --> 0:12:58.600 so I know when we would shop to you would 0:12:58.679 --> 0:13:01.480 find a place that didn't ar sales tax, especially on 0:13:01.600 --> 0:13:04.040 like large items, if they didn't have a store, and 0:13:04.120 --> 0:13:06.640 you would. I'm guilty of that. I did it in 0:13:06.640 --> 0:13:09.120 the past, even before that. People in Manhattan would go 0:13:09.160 --> 0:13:11.319 to New Jersey two years ago to do this right 0:13:11.360 --> 0:13:13.920 and still do you know? You see that? So listen, 0:13:14.080 --> 0:13:17.080 So what a windfall for for UM the states? Tim 0:13:17.160 --> 0:13:20.120 was talking about some of them, whether it was Texas specifically. 0:13:20.160 --> 0:13:23.520 I mean, we're talking about real money, Danielle, Yes, we are. 0:13:23.640 --> 0:13:27.000 And and so for example, California is the world fifth 0:13:27.040 --> 0:13:30.959 largest economy. They reported that online tactical sales more than 0:13:31.000 --> 0:13:34.319 tripled in the first half of compared to a year earlier. 0:13:34.720 --> 0:13:37.959 New York reported a dramatic shift in consumer spending as 0:13:38.080 --> 0:13:43.000 people UM started shopping online more during lockdown. And this 0:13:43.120 --> 0:13:47.360 really bolstered text collection UM and really lead to a 0:13:48.440 --> 0:13:53.520 UM a happy I guess collection for states that we're 0:13:53.600 --> 0:13:57.440 going through some really tough times, Danielle. I have to say, 0:13:57.440 --> 0:13:59.800 reading your story it made me think too that you know, 0:14:00.080 --> 0:14:02.760 whenever we talk about increases in taxes or tax policy, 0:14:02.800 --> 0:14:05.160 everybody's like, I don't I don't want to pay more taxes. 0:14:05.200 --> 0:14:09.079 But in some ways this was a way of easily 0:14:09.200 --> 0:14:14.920 increasing revenues, helping out states, providing another revenue stream and 0:14:15.240 --> 0:14:19.600 kind of shared among the public. Right, So this was 0:14:19.800 --> 0:14:22.520 a The way that the Texas controller described this to 0:14:22.560 --> 0:14:24.680 me is for him, this was an issue of fairness. 0:14:25.040 --> 0:14:27.040 This is saying that you can if you have to 0:14:27.040 --> 0:14:28.440 walk down the street and you can go to your 0:14:28.480 --> 0:14:30.560 local store and you have to pay sales taxes there, 0:14:30.960 --> 0:14:33.560 why don't you have to pay them online? Um? And 0:14:33.760 --> 0:14:35.520 And that was sort of a core issue for him. 0:14:35.680 --> 0:14:38.920 And then as states started implementing these laws allowing them 0:14:38.920 --> 0:14:43.440 to collect from remote sellers, they also implemented laws allowing 0:14:43.440 --> 0:14:46.680 to connect from collect from these marketplace aggregators which are 0:14:47.320 --> 0:14:51.760 UM like etc. And eBay, places where businesses can sell 0:14:51.960 --> 0:14:56.760 products to consumers. But also liked it. But what I 0:14:56.760 --> 0:14:59.360 did learn in your story too, was that not every 0:14:59.400 --> 0:15:02.760 state has been able to do this. Uh, Florida and 0:15:02.800 --> 0:15:05.400 Missouri are among the forty five states that levy sales 0:15:05.400 --> 0:15:08.600 taxes have who have not moved to collect those dollars yet. 0:15:08.640 --> 0:15:11.119 Does does that mean that they missed out on this completely? 0:15:11.160 --> 0:15:13.160 They're working on it, though, are they They're working on it, 0:15:13.560 --> 0:15:17.280 but they have bills making their way through the state legislature. UM, 0:15:17.320 --> 0:15:19.320 but experts that I have talked to say that they 0:15:19.360 --> 0:15:22.280 may have left money on the table for not implementing 0:15:22.360 --> 0:15:26.000 something a little bit sooner, given this really acceleration in 0:15:26.040 --> 0:15:28.160 the e commerce space of the pandemic sort of forced 0:15:28.160 --> 0:15:30.480 on consumers. But I think it's just such an interesting 0:15:30.560 --> 0:15:32.480 way when you think about the tax base, right, and 0:15:32.520 --> 0:15:35.200 we think about federal taxes allocating to different states and 0:15:35.200 --> 0:15:37.760 so and so forth, I mean, here's a way of 0:15:37.880 --> 0:15:43.480 really helping out states and municipalities. Danielle, Yes, So this 0:15:43.880 --> 0:15:47.240 was um the ability to collect these online sales taxes 0:15:47.360 --> 0:15:50.440 really helped mitigate some of the fiscal fallout that states 0:15:50.440 --> 0:15:54.520 and cities were feeling the pandemic, and they were um 0:15:54.600 --> 0:15:57.840 seeing revenues fall in other areas. So you have hotel taxes. 0:15:57.880 --> 0:16:00.440 People aren't traveling, they're they're not staying in hote hells. 0:16:00.440 --> 0:16:03.320 So that was an area in almost all states that 0:16:03.400 --> 0:16:07.280 saw decline. And this, although not a panathea for states, 0:16:07.320 --> 0:16:10.720 really helped sort of cushion the blow um in in 0:16:10.760 --> 0:16:14.400 other revenue areas. Now, I know that states don't break 0:16:14.400 --> 0:16:17.160 out all the types of tax revenue that they get, 0:16:17.160 --> 0:16:20.720 so we don't necessarily know in every single case what 0:16:20.800 --> 0:16:24.040 portion came from online sales and this quote unquote new 0:16:24.080 --> 0:16:27.120 tax um. But in general, do we know from the 0:16:27.120 --> 0:16:29.600 analysts you spoke to, from the reporting that you did, 0:16:29.960 --> 0:16:33.080 just how much it helped in so um from the 0:16:33.120 --> 0:16:35.840 experts I spoke with that this Wayfair decision could not 0:16:35.960 --> 0:16:38.560 have committed better time for states and local governments. If 0:16:38.560 --> 0:16:41.480 you look at Texas, for example, they gained over one 0:16:41.520 --> 0:16:44.480 billion dollars in the first twelve months of collections and 0:16:44.600 --> 0:16:47.880 half a billion since they started collections just for local 0:16:47.960 --> 0:16:51.400 local governments. That is a significant number, even for a 0:16:51.480 --> 0:16:54.320 state as biggest Texas that was going through some pretty 0:16:54.320 --> 0:16:58.520 difficult financial expectations earlier this year. I guess the days 0:16:58.560 --> 0:17:01.880 of finding those tax free, don't you remember? Did I 0:17:01.920 --> 0:17:04.600 totally remember? And I remember when this decision came down. 0:17:04.640 --> 0:17:06.240 It was a bit. It was a big one. It's 0:17:06.280 --> 0:17:07.840 a big fight for It was a big fight. And 0:17:07.880 --> 0:17:09.880 the funny thing is is we're talking about Wayfair here. 0:17:09.920 --> 0:17:12.320 But it was a big deal for Amazon too huge, 0:17:12.440 --> 0:17:14.840 Not as much now because they have they have distribution 0:17:15.400 --> 0:17:17.520 and like a physical presence in so many places, but 0:17:17.560 --> 0:17:19.800 it was huge. But I remember having conversations we're buying 0:17:19.840 --> 0:17:21.359 something at home, like, yeah, but you gotta you know, 0:17:21.359 --> 0:17:23.800 you gotta pay sales tax. Let's look somewhere else. We 0:17:23.840 --> 0:17:26.399 can't do that anymore, Danielle, great piece of reporting. I 0:17:26.440 --> 0:17:29.879 really appreciate it. Danielle Moran, MEETI Bomb reporter at Bloomberg News. 0:17:30.000 --> 0:17:31.680 Her story, by the way, in the current issue of 0:17:31.720 --> 0:17:34.720 Bloomberg Business Week magazine. It is on newsstands, online and 0:17:34.920 --> 0:17:42.600 on the Bloomberg terminal. You're listening to Bloomberg Business Week 0:17:42.760 --> 0:17:46.640 with Carol Messer and Bloomberg Quick Takes Tim Stinovik on 0:17:46.720 --> 0:17:51.440 Bloomberg Radio. So this is Bloomberg Business Week and our 0:17:51.480 --> 0:17:54.520 next guest. The company that she works for, State Lauder. 0:17:54.640 --> 0:17:57.760 It's a behemoth when it comes to cosmetics, skincare, Khan, 0:17:57.880 --> 0:17:59.800 you know who they are, Fragrance, it's one of the 0:17:59.840 --> 0:18:01.760 lord just in the world. They own a portfolio brand, 0:18:01.840 --> 0:18:06.119 some created internally, many others like Lamaire, Bobby Brown, glam Globe, 0:18:06.160 --> 0:18:09.920 Mac and others they've been acquired. They really have their 0:18:09.960 --> 0:18:13.440 pulse on the consumer, especially when it comes to this space. 0:18:13.640 --> 0:18:16.320 Joining us right now is Tracy Travis, Executive Vice President 0:18:16.359 --> 0:18:19.439 Finance CFO of s day Lauder and she is with 0:18:19.560 --> 0:18:21.360 us on the phone in New York City, Tracy. Great 0:18:21.400 --> 0:18:25.080 to have you here with Tim and myself. Do we 0:18:25.119 --> 0:18:30.560 have her? Okay? Good? Good? Yes, we can uh listen. 0:18:30.680 --> 0:18:33.000 Great to have you here. And there's so much to 0:18:33.000 --> 0:18:35.920 talk about. And we're very interested in your new Equity 0:18:35.920 --> 0:18:37.760 and Engagement Center for Excellence. And I want to get 0:18:37.800 --> 0:18:40.800 into the programs you guys have in just a moment. 0:18:40.840 --> 0:18:43.680 But I'd love to get your thoughts on today's environment. 0:18:43.680 --> 0:18:46.640 I mean S. D. Lauder is a global brand, so 0:18:46.680 --> 0:18:49.040 well known, you sell in some hundred and fifty countries. 0:18:49.080 --> 0:18:52.159 How would you describe today's global market environment right now? 0:18:52.200 --> 0:18:55.560 And and how the consumer is doing? Yeah, I mean 0:18:55.600 --> 0:19:00.440 the consumer um, you know, based on what we've seen globally, 0:19:00.680 --> 0:19:04.520 you know, is still UM supporting obviously prestige beauty. I 0:19:04.560 --> 0:19:07.880 mean our our sales, you know, are are recovering UM, 0:19:08.000 --> 0:19:12.040 you know, every every month, every every quarter. Certainly we 0:19:12.119 --> 0:19:15.600 just reported our our second quarter results UM and we 0:19:15.640 --> 0:19:19.600 return to growth UM for uh, you know, a quarter 0:19:19.680 --> 0:19:23.240 earlier than what we had expected. UM. But the consumer 0:19:23.480 --> 0:19:27.080 is uh, you know, is gradually UM you know, coming 0:19:27.119 --> 0:19:30.600 back to I think spending UM in in the categories 0:19:30.640 --> 0:19:34.360 that that are important to to her, like beauty. How 0:19:34.359 --> 0:19:39.360 did consumer spending shift during the pandemic? Consumer UM spending 0:19:39.640 --> 0:19:43.520 shifted very much UM to online. First of all, so 0:19:43.680 --> 0:19:46.560 you know, we were one of the companies that um 0:19:46.640 --> 0:19:50.600 our our distribution was deemed to be non essential globally. 0:19:50.680 --> 0:19:53.359 You know, we sell only prestige beauty, so we sell 0:19:53.400 --> 0:19:56.760 in a lot of department stores and specialty stores UM 0:19:56.800 --> 0:20:00.680 which closed UM initially during during the pan eMMC UM 0:20:00.720 --> 0:20:04.560 and then reopened. But you know, traffic has been been 0:20:04.600 --> 0:20:08.000 a bit light UM and has gradually been building. So 0:20:08.040 --> 0:20:10.640 we saw a tremendous shift to online and we were 0:20:10.680 --> 0:20:13.800 prepared for that, you know, with our own brand dot 0:20:13.880 --> 0:20:17.080 com sites UM, with our retail partners and UH and 0:20:17.119 --> 0:20:19.359 their sites as well as some of the platforms in 0:20:19.400 --> 0:20:23.280 pure play UM sites that that we sell on UM. 0:20:23.359 --> 0:20:28.399 We saw a tremendous UM you know, UH shift to 0:20:28.920 --> 0:20:33.119 UM to looking for her favorite skin care products, whether 0:20:33.160 --> 0:20:36.800 it's Lamaire or Clinique or or Essay Lauder UM or 0:20:36.840 --> 0:20:39.880 some of the other skincare brands that we UH that 0:20:39.920 --> 0:20:43.359 we have. We also saw UM a pick up in 0:20:43.400 --> 0:20:46.880 fragrance UM and again no surprise, more people working from 0:20:46.920 --> 0:20:51.720 home people um were Um, we saw our our bath 0:20:51.760 --> 0:20:55.240 and body category grow as well as our home fragrance 0:20:55.240 --> 0:20:58.560 category grow. UM. So you know, those are are some 0:20:58.640 --> 0:21:01.560 of the trends that we have observed during the pandemic. 0:21:01.640 --> 0:21:05.359 Makeup has been the most impacted, no surprise given given 0:21:05.400 --> 0:21:07.760 the fact that you know, many people are working from home, 0:21:07.800 --> 0:21:10.920 and those that are going out many are wearing masks 0:21:10.960 --> 0:21:14.160 as uh, you know, as instructed, and so that does 0:21:14.240 --> 0:21:18.480 have an impact on particularly the largest categories of makeup, 0:21:18.520 --> 0:21:22.840 foundation and lips. UM. And those are categories that we expect, 0:21:22.880 --> 0:21:28.080 certainly as the vaccine rollout um, you know continues to progress, 0:21:28.400 --> 0:21:31.639 uh and uh, and we start to see people migrating 0:21:31.680 --> 0:21:33.960 back to work and back to school and resuming some 0:21:34.040 --> 0:21:36.800 of their social activities. UM, we expect to you know, 0:21:36.840 --> 0:21:39.440 to have a strong, strong makeup recovery at that point 0:21:39.440 --> 0:21:41.399 in time. Tracey, I feel like you've described me. I 0:21:41.440 --> 0:21:45.960 spent so much more on skincare uh in the last 0:21:46.560 --> 0:21:50.280 year or so. UM then then you know, certainly on 0:21:50.840 --> 0:21:53.760 you know, traditional makeup. And it's just very interesting you 0:21:53.840 --> 0:21:57.199 talked about though, you know, shifting to online and I 0:21:57.240 --> 0:22:00.840 do wonder we've seen just an increased digitization shin of 0:22:00.840 --> 0:22:03.320 our world when it comes to retail, not just you guys, 0:22:03.320 --> 0:22:07.119 but everybody. And you know, folks that had strategies that 0:22:07.160 --> 0:22:08.800 maybe they were going to roll out over the you know, 0:22:08.880 --> 0:22:10.640 next three to five years, all of a sudden did 0:22:10.640 --> 0:22:14.080 them overnight? What has changed in terms of your digital 0:22:14.119 --> 0:22:17.719 strategy specifically because of the pandemic and just you know, 0:22:17.760 --> 0:22:20.919 seeing how this is how an increasing number of consumers 0:22:20.920 --> 0:22:24.399 want to shop. Well, we had a very strong UM 0:22:24.400 --> 0:22:28.119 focus on on online for for many years. Actually we 0:22:28.160 --> 0:22:31.440 started our online sites more than more than twenty years 0:22:31.440 --> 0:22:34.080 ago UM, and we were focused at was our fastest 0:22:34.080 --> 0:22:37.320 growing channel heading into the pandemic. What we've seen is 0:22:37.359 --> 0:22:42.320 an acceleration of the penetration of of online. Certainly, more consumers, 0:22:42.600 --> 0:22:45.040 a lot of new consumers that we had not m 0:22:45.320 --> 0:22:49.800 seen purchase online previously started to purchase online. Obviously when 0:22:50.600 --> 0:22:54.399 when UM, brick and mortar, UM, you know, became less 0:22:54.520 --> 0:22:58.560